Insights: FCA Review into firms’ treatment of customers in vulnerable circumstances

FCA review of treatment of vulnerable customers. Thi included both customer surveys and firm questionaires. Summary below.

https://www.fca.org.uk/publications/multi-firm-reviews/firms-treatment-vulnerable-customers

Key Take Aways

  • Firms have made progress in supporting vulnerable customers, but challenges remain.
  • The FCA evaluated the effectiveness of the existing guidance (FG21/1) for vulnerable customers.
  • There is a stronger focus on delivering better outcomes for vulnerable consumers, partly driven by the Consumer Duty.
  • Consumers in vulnerable circumstances report worse outcomes compared to others.
  • Vulnerability often involves multiple characteristics, which complicates support.
  • Stakeholder feedback confirms that the guidance remains valuable and does not need updating.
  • Case studies have been provided to illustrate good practices and areas for improvement.
  • The FCA will continue to monitor the impact of the Consumer Duty on firms’ treatment of vulnerable customers.
  • Positive shifts in firm culture, awareness, and practices towards vulnerability were noted.
  • Firms view the definition of vulnerability and its drivers as clear and helpful for their operations.
  • Research data from the Financial Lives survey and additional consumer research show continued poor outcomes for vulnerable consumers.
  • Firms are encouraged to leverage good practice examples to enhance their support strategies.

Innovation

  • The introduction of case studies to help firms apply good practices more effectively.
  • Ongoing multi-firm research and follow-up monitoring to assess the impact of practices on vulnerable customer outcomes.

Key Statistics

  • 1,500 consumers surveyed for research into outcomes for vulnerable customers.
  • 725 firms responded to a voluntary multiple-choice survey assessing their actions on vulnerability.
  • 29 firms across 12 markets participated in follow-up monitoring regarding outcomes for vulnerable customers.
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